Entrepreneur’s Guide to Intellectual Property – Blog Series: Trademark

By: Laura M. Konkel

What is a Trademark?
A trademark is any word, slogan, logo or other device that helps consumers identify and distinguish the source of a product or service. Even smells, sounds, colors, product shapes and packaging designs can be trademarks – e.g. the color brown applied to vehicles used for delivery services (owned by UPS), the musical notes G, E and C played on chimes when used in connection with television broadcast services (owned by NBC Universal) and the well-known shape of the curved COCA-COLA bottle. When consumers see or hear these unique trademarks, they know what company is offering the product or service without the need for words.

As a source indicator, a trademark helps consumers decide whether they want to buy or avoid a product or service based on their prior experiences with something else bearing that trademark. For example, a consumer who had a positive experience with a FORD vehicle may decide to buy another FORD vehicle in the future. Thus, a trademark that builds a positive reputation in the marketplace is an invaluable business asset.

Selecting Strong Trademarks
When developing a new brand name it’s tempting to pick a term that describes the product or service. For instance, if you are launching a new detergent, the name ULTRA CLEAN may be appealing because you want consumers to immediately understand that it is a superior cleaning product. However, as a general rule, terms that describe a characteristic of the product or service, or attribute quality or excellence to it (e.g. ULTRA), are very weak source identifiers that do little to set your product apart from those of your competitors.  Descriptive and laudatory terms are also subject to little, if any, trademark protection, meaning it will be difficult to prevent competitors from using an identical or nearly identical product or service name.

More distinctive brand names generate more consumer recognition and are entitled to more protection. The strongest trademarks are fanciful or coined terms, which have no dictionary definition (e.g. KODAK film or EXXON petroleum). Arbitrary trademarks, which are comprised of terms with common meanings but not in relation to the product or service for which they are used (e.g. APPLE computers) are also very strong. Suggestive terms, which hint at a characteristic of the product or service without immediately describing it (e.g. COPPERTONE sunscreen), are also capable of trademark protection.

Clearing Trademarks for Use
Before adopting and investing money into a new trademark, you should first determine whether someone else is already using the same trademark, or a very similar trademark, in connection with a related product or service. If you use a trademark similar to one already used by a competitor, it may erode the source-indicating function of your competitor’s trademark and cause consumer confusion, subjecting you to a trademark infringement claim. If you infringe another’s trademark rights, you will have to rebrand your product or service and you may also be liable for monetary damages.

For this reason you should have a qualified attorney conduct a clearance search before adopting a new trademark. A clearance search typically involves a review of federal and state trademark databases, as well as other sources of information such as company name databases and the Internet. After completing a survey of current trademarks in the marketplace, your attorney will provide an opinion as to whether your new trademark poses an infringement risk. It is recommended that you conduct a clearance search in each country in which you intend to use your trademark.

Trademark Protection: Should I Register My Trademark?
In the U.S., rights in a trademark belong to the first person or business to use it. You need not have a federal registration to own trademark rights; however, without a registration, your rights will typically be limited to the geographic area in which your products or services are offered.  For example, if you operate ABC BAKERY in Portland, Maine and sell your baked goods only in that area, and you do not own a federal registration for your ABC BAKERY trademark, then you may not be able to prevent someone else from operating an ABC BAKERY in San Diego, California. If you are granted a federal registration for ABC BAKERY, it will constitute a legal presumption of your ownership of that trademark and your exclusive right to use it nationwide as of the filing date of your federal trademark application.  Other benefits of federal registration include public notice of your claim of trademark ownership, the ability to record your trademark with U.S. Customs and Boarder Protection Service to prevent importation of infringing or counterfeit products and the right to use the ® registration symbol.

There are many countries that, unlike the U.S., do not recognize unregistered trademark rights. In those countries, the first person or business to register a trademark acquires exclusive rights in it and can prevent others from using the same or similar trademark, even if that other party has already used the same mark in that country for many years.  For this reason it is important to consult with a trademark attorney to determine where trademark applications should be filed in order to protect your valuable trademark rights.

Proper Trademark Use
Trademarks are adjectives. A trademark should never be used as a noun or a verb.  It should always be used as an adjective that describes the common, generic name for the product or service.

Correct:

We use XEROX copy machines in our office.

I own ROLLERBLADE in-line skates.

My kids love OREO cookies.

Incorrect:

I made a XEROX.

Please XEROX these documents.

I’m going ROLLERBLADING.

My kids love OREOS.

If a trademark is used improperly as a noun or a verb it may become the generic description for, or synonymous with, a general class of products or services and lose its source-indicating function. Then, everybody will be free to use it.  Examples of well-known terms that were once trademarks include “aspirin” and “escalator.” These terms lost their trademark significance through improper use.

Be consistent. Always use a trademark in the same manner, and if you registered it, use it exactly as shown in the registration certificate. Do not change punctuation or make a two-word mark into one word (e.g. X-Y-Z WisconsinDGET vs. XYZWisconsinDGET).

Use the appropriate trademark symbol. The TM symbol can be used to identify any trademark, registered or unregistered.  It has no legal significance but indicates to others that you claim rights in the marked term. In contrast, the ® symbol can be used only to identify a federally registered trademark.

It is not necessary to mark every occurrence of a trademark with the TM or ® symbol, but it certainly doesn’t hurt. At a minimum, the first and/or most prominent use of a trademark on a product, on a package or in an advertising piece should be marked appropriately.

Distinguish trademarks from surrounding text. In addition to using the TM or ® symbol, you can also emphasize trademarks by printing them in all capital letters or in a bold, italic or other unique font. This helps make it clear to others that you are claiming trademark rights in a particular term.

Maintaining Trademark Rights
You must use a trademark to maintain rights in it. If you stop using a trademark for a period of time with no intention to use it again in the future, then you will abandon your rights in the trademark and it will become available for others to use.

Misuse of your trademark by others can also result in a loss of rights. If you don’t enforce your rights against infringers, your trademark will lose its source-indicating function, just as “aspirin” and “escalator” lost their trademark status (discussed above). If you discover that someone is infringing your trademark it is important to take action, or risk losing your rights.

To view the next blog in this series, click here.

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One thought on “Entrepreneur’s Guide to Intellectual Property – Blog Series: Trademark

  1. Pingback: Entrepreneur’s Guide to Intellectual Property – Blog Series: What Every Entrepreneur Should Know About U.S. Law and Patent System (Part 3) « Venture Best

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